HMO Mortgages 2017-06-08T13:18:10+00:00

HMO Mortgages

  • Licenced or unlicenced
  • Term up to 35 years
  • No minimum income
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HMO Mortgages

Whether you are a first-time landlord or an experienced investor, our specialist advisors will do the comparison for you to find you the best HMO Mortgage rates possible.

House in multiple occupation or HMO mortgages are becoming more popular and investing in HMOs is no doubt a profitable way of letting. An HMO is a specialist type of buy to let property. They are typically a single property, let to three or more individuals on separate tenancy agreements and with bedrooms rented out separately, often sharing some common areas such as bathrooms and kitchens. HMO property is becoming more popular with high rental yields meaning increased profits for landlords.

Many people think that a commercial mortgage is needed for HMO property, however, this is often not the case. We have access to a large number of HMO mortgage lenders to suit property ranging from a smaller multi-let with only a few tenants to a large multi-unit block.

We search the whole market to find you the lowest HMO mortgage rates. By doing this, you get to keep as much of the rent received as possible, meaning you make more profit.

Our team of expert advisors are on hand to talk through your circumstances and we send you terms out within two hours.

We pride ourselves on our fast and unbiased service and our team always aim to make the process simple and easy to follow. Below is a list of common questions we receive about HMO Mortgages.

  • Up to 85% LTV (100% with additional security)
  • Limited companies, LLP’s & SPV’s accepted
  • Interest only or repayment
  • Loans from £25,000 with no maximum
  • No maximum bedrooms
  • Corporate leases accepted
  • Individual or shared tenancies
  • New build or newly converted accepted
Click Here To Enquire Online Now

What Is An HMO Mortgage?

HMO Mortgages are loans used to purchase a house in multiple occupation with the property used as security for the debt. Often HMO mortgage lenders will be able to lend the funds interest only with fixed and variable rates both available.

How Do I Apply For An HMO Mortgage?

Whether you are looking for information before purchasing your first HMO or you are an experienced investor, we are able to make the process of applying for HMO mortgages easy. Below is an example of the steps in a typical application:-

  1. Contact us by either enquiring through our website or calling us on 0800 088 6008. We will discuss your current circumstances and the property you are looking to purchase or refinance and will offer initial terms based on your needs and preferences.
  2. We will send out a decision in principle within two hours outlining the terms available with the best HMO mortgage rates available to you including any fees and charges that may be payable. Before issuing terms we always ensure the lender will be appropriate in terms of both costs and other factors that may be important such as their ongoing support should you wish to continue growing your portfolio.
  3. Once you are happy with the terms and understand exactly how the product works, we will start the application process with the lender and once you have passed the initial assessment we’ll look to get the survey report, often known as the valuation report instructed. Once the valuation has taken place a report is sent to the lender to check.
  4. Once the application has been fully assessed, including a satisfactory valuation report and considered satisfactory a full offer of lending is made.
  5. Now the legal work will step up and once it’s all done and everything is signed you are free to draw down on your loan and complete on your property transaction/refinance.

How Much Can I Borrow Against An Hmo?

When looking to take out an HMO mortgage, lenders tend to use 2 different checks to confirm affordability. Firstly, a lender will check the loan to value (LTV), lending up to 85% generally. This is worked out by dividing the loan amount by the value of the property and multiplying it by 100 and is expressed as a percentage.

In addition to calculating the loan to value, lenders will look at the rental income and rule that the rental income must be more than the rent by a set figure, for example, the monthly rent must be 140% of the mortgage payment. This varies wildly between lenders and there are many other factors lenders tend to look at which means specialist knowledge of the market can be crucial. Our experts are always available to run through these figures with you after a full conversation about your circumstances.

I Am Looking To Buy An Hmo Property, When Should I Apply For My Mortgage?

Due to the wide-ranging pricing and number of differences between properties and HMO mortgage rates, it is important that you consider your finance costs early on when looking into this type of property. Should the products available work out to be different to what you expected, this can impact on your monthly repayment amount significantly.

What Types Of Property Will You Lend On?

Many properties used as HMO’s are large buildings which have been converted into an HMO. This may lead to the need for specialist advice in finding the right lender for your circumstances. We have lenders for almost any circumstances and are able to lend on almost any property type, including:-

  • Converted Hostels
  • Converted B&Bs
  • Blocks of flats
  • Shared Houses on single or multiple ASTs
  • Houses Converted into bedsits
  • Student Halls & Flats
  • Converted Bedsits
  • Employee Accommodation

Are Rates Higher Than Standard Buy To Lets?

HMO mortgage rates tend to vary depending on the type of property and number of tenants, along with a number of other factors. As a general guide, rates start at very similar levels to standard buy to let mortgages and in many cases, the products are almost identical.

Due to the number of different factors in assessing an application and the differences between different HMO mortgage lenders, it is crucial that finance costs are considered early.

Can I Still Apply If I Have Adverse Credit?

Yes – As a whole of market broker, we have access to products which cater for people with adverse credit.

Although many HMO mortgage lenders can shy away from lending to people who have suffered previous credit problems, we are able to secure funding for clients despite their previous issues.

We have secured finance for many clients who have faced or are currently facing financial difficulties and even have access to lenders who specialise in this area.

Why Should I Use ABC Finance For An HMO Mortgage?

HMO Mortgages can be a slightly more specialised area than standard buy to let lending and with this in mind, it would be a wise move to seek the advice of an experienced specialist broker.

We are able to search the whole market to secure you the best terms available offering you honest advice and market leading rates, making the whole process easy and hassle free. To find out more enquire online now or call to speak to one of our HMO experts on 0800 088 6008. Alternatively click here to read The Complete Guide to HMO Mortgages or click here to try out our HMO Mortgage Calculator.

Capital repayment basis
interest only also available

Limited companies accepted
also applications from individuals

100% loan to value
with additional security

Whole of market
including specialist lenders

Investing in Houses of Multiple Occupation

Case Study: HMO Mortgage

When one of our clients decided to start investing in Houses of Multiple Occupation (HMO), the thought of having five separate tenants paying rent on just one property certainly appealed. Unfortunately they had no idea how to choose a suitable property for the first purchase, but one of our ABC Finance advisers was able to help and provide the correct advice. A purchase was soon agreed and a specialist HMO mortgage arranged.

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